What is the upside?
Combined, with these three products alone, we’re talking about $12.5 billion in peak total revenue; and this does not include a partnership with Pfizer that could total $507 million. If we use the same 5% royalty rate, and 80% of products using the technology, than Halozyme Therapeutics, Inc. (NASDAQ:HALO) could earn $500 million on the development of its late-stage pipeline.
If we use the same five times peak sales ratio, which is the industry average, than Halozyme Therapeutics, Inc. (NASDAQ:HALO) could have upside of at least 170%. In terms of risks, there is always a chance that its technology will be a commercial flop; although I would be highly surprised due to its benefit for patients.
Thus, I do believe that Halozyme Therapeutics, Inc. (NASDAQ:HALO) is presenting a great deal of upside. Moreover, it is an attractive acquisition target. Roche is the world leader in vaccines, and may find Halozyme’s technology beneficial long-term to its current product offerings.
Baxter might even find Halozyme Therapeutics, Inc. (NASDAQ:HALO) attractive. Last year, Baxter spent $1.2 billion on R&D and has expanded its pipeline abruptly. Therefore, with Baxter being a leader in hospital-based IV treatments, I think it could be a viable option as a potential acquirer.
In other words, there are several options for this company, all of which I think will produce gains for investors.
Sherrie Stone has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
The article Is This Delivery-Focused Biotech a Buy? originally appeared on Fool.com.
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